The left-wing entry

Seeing as both José Antonio Griñan and Diego Valderas are clapping themselves on the back for having successfully stemmed the Spanish right-wing juggernaught - all other issues having disappeared entirely from the last two weeks of the Andalusian election campaign - we thought we'd pop up a chart of the historical progress of the region's political right, beginning as an utterly discredited political force in 1986.

Combining the PSOE/IU two-horse entry does nothing to mitigate the long-term trend.

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Who won and who lost

A couple of brief observations on last night's regional elections in Andalucía.

For the first time ever, the Partido Popular out-polled the PSOE. A look at the chart on the left will give the reader an idea of the long term trend in the region's voting patterns. Thirty years ago the socialists defeated the PP (then known as the Alianza Popular) by a margin of 3-to-1. The socialist glee at being able to continue to govern, with the aid of Izquierda Unida, masks a certain amount of concern over the results. For their part, the PP should be more than satisfied - although Mariano Rajoy might be ruing the day he decided to rush onward with labour market reforms.

What failed the most in these elections were the polls - including those conducted at the voting station exits. The pressure of street corner gossip had many voters claiming they were going to vote (or had just voted) PP. Many, in the end, didn't. There are lots of people who live very directly courtesy of the largesse of the PSOE-A.

Then there's that great swath of PP supporters who are permanently pissed off about something. Even anything. When the socialists govern, they all sit down together and cheer the tertulias on Intereconomía. When their party wins - or even looks like it is going to - suddenly the most petty of intra-party conflicts (of which there are many) comes to the fore. A distant relative of mine is a classic example of this moneyed class political immaturity so prevalent among followers of that party. After eight years of getting up every morning and ranting for an hour or two about Zapatero, when it became evident that Rajoy would win by a a landslide, she refused to vote. Her excuse? Something about their leader refusing to jump on the AVT bandwagon.

The writer will just take an informed (after all, fate has destined him to spend an inordinate amount of time with these idiots) a guess that the right-wing's share of the very high 38 percent of the eligible who did not bother to vote were having one of their hissy fits.

Lastly, we're impressed at the sheer stupidity of Izquierda Unida leader, Diego Valderas. After having spent months railing passionately on about the rot of corruption within the PSOE's Junta de Andalucía, he comes out and declares that he will not, under any circumstances, be talking coalition with the PP. Something about oil and water was the analogy he used. Eliminating that as a bargaining chip is tantamount to announcing that he'll be spending the next four years kissing Pepe Griñan's ass.

The booby prize goes to CanalSur which closed off election coverage with a shot of the PSOE headquarters - accompanied by music best described as 'triumphalist'. We guess the fact that the party actually ran second was trumped by the producer's joy at not having lost his job - yet. Don't worry, pal. That's coming down the pipe, along with lots of other cost saving programs, as we speak.

Of course, one wouldn't be able to guess it by reading the headlines, but the Spain 10-year spread with respect to the bund tightened 12 over the course of today.

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At the local level

The poster, from the local PSOE website, announces tonight's campaign-ending meeting.

According, on the other hand, to the March 7 edition of El Ideal:

Díaz Viñas, que fue alcalde cazorleño desde el año 2000 al 2008*, junto a Navarrete Tíscar, concejal del PSOE en el mismo Ayuntamiento desde 1995 hasta 2011, están imputados como supuestos autores de un delito de tráfico de influencias.

.

The correct Google Translate of the predicate of that sentence... the ex-mayor and one other town councillor:

...are charged as alleged perpetrators of a crime of influence peddling.

The Jaén provincial government website informs us that 'el bonito', as he's known locally, is currently the Secretary of Municipal Policy for the provincial PSOE.

*His resignation from the mayor's office followed the 2008 opening of an investigation into his alleged threatening of a local with political reprisals. Diaz was later charged and convicted.

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They just don't get it

From the Junta's statistics site, the percentage of all new incorporations that are still dedicating themselves to real estate and construction.


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It's going to be a long week

Everybody's favourite Nobel economics laureate starts the last week of winter off by treating us to the chart on the left under the heading 'Europe’s Two Depressions'.

A suggestion Mr. Krugman - back German war preparations out of the equation and post again.




It's only 5 AM New York time and the piece has been re-tweeted 159 times.

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Onward Andalucía

We are slightly in awe of the PSOE-A incumbent president's unfailing defence of his principles. As polls patronized by three distinct national newspapers - two right wing as well as the socialist stand bearer, El País - now predict a PP majority from next Sunday's regional elections in Andalucía for the first time in modern democratic history, he continues to campaign trumpeting the inexorable forward march of state-sponsored social progress. Crisis? What crisis?

According to El Ideal, at a recent campaign stop in Andújar Pepe Griñán asked the audience to marvel...

'...that a handicapped girl from Lopera could begin her university studies.'

The surveys might, on the other hand, have it that the electorate is more amazed at the fact that her chances - wheelchair or not - of finding employment within a reasonable period after graduation are currently about 1-in-2. Thirty five years of uninterrupted Andalusian advances (to which the daily litany of incorporations of the marginalized on Canal Sur news will attest) and it comes down to the flip of a coin.

With the same extreme reticence as in November's general elections, the writer will be voting for the populares. Making the decision even more difficult, he happens to know a couple of fairly close family members of the Andalusian PP leader, Javier Arenas. Señoritos de pura cepa. We doubt that this lot will be any better able to grasp the nature of the problem.

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Education undeserving of the name

Lost in Sant Cugat, a European-born, American-educated and now Spanish-resident software programmer, was complaining recently that the Catalan educational system* offered no courses in computer science (this not being merely switching on the box and connecting to Twitter) for schoolchildren. As he says:

Even schools like Agora or Europa, which allegedly have computer science programs as of ESO 4 (Grade 10) are typically Spanish in their approach, and spend a lot of time on description and memorization and not that much on actually learning how to program.

If you think that Grade 10 is too early, that was already three years into my computer science career, and the school I went to allowed me to attend a local university for extra enrichment.

Of the 4,200 companies exhibiting at the recent trade show, CeBIT, in Hannover, only 22 were Spanish.

*We use the available example of Catalonia, but we're willing to stand corrected on the outside chance that this is not true for the entire country.

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Bank merger deadline approaches

Among the first things that the new PP government attended to at the end of last year was to order the smaller Spanish banks (mostly ex-cajas) to present viability plans - which explicitly included mergers - prior to the end of March. Today, the CNMV received notification that CaixaBank was conducting due diligence prior to making an offer for Banca Cívica*.

Expect it, if it materializes, to be an all share purchase. Both are listed companies. BCIV up 9 percent since Friday close. Volume the last two days around 8 times normal.

*The writer owns some BCIV.

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January Spain home sales statistics

Reflecting home purchases contracted (mostly) in November and December, the INE house sales report for January notes that transactions increased by 42 percent between that month and the previous. But before anyone hauls out the champagne flutes... this is yet another outlier consequence of tax policy.

The prior PSOE government of José Luis Rodríguez Zapatero had - after earlier in 2011 attempting (moderately successfully) to advance sales by announcing the end of a tax deduction and an increase in VAT applicable - lowered the sales tax to 4 percent as elections approached. This measure was to be in effect only until the end of December.

Mariano Rajoy's campaign pledge was to extend this indefinitely. He did so on December 30th.

If the jump in sales from December to January - the latter primarily reflecting transactions made in November and December - is any indication, many people didn't believe him... or, less likely, doubted that he would win the November general elections.

Continuing to be super interesting, and utterly mysterious and opaque, is the continued climb in the category of sales referred to as 'Other' - comprised primarily of repossessions, debt/equity swaps and the horizontal divisions of completed apartment projects. With these totalling 18 percent more than normal home sales over the past year, it's about time the INE started breaking them into their components.

In any regard, the 33,087 total regular purchases deeded in January are the most since the effects of last year's legislative manipulations wore off.

One can find several hundred references to the 26.3 percent year-on-year decrease in sales via Google. The reader might pardon us for feeling that that angle was well covered - and possibly irrelevant, given all the political machinations involved.

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Men (and women) in black

Compare and contrast - Mariano Rajoy's first cabinet with...

Zapatero's last.

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Eating your young is not a free lunch

Excessive indebtedness, certainly. But if there ever were an argument in favour of restructuring the labour market in Spain so that those that spend most freely - the young - get back to work... this is it.

Readers definitely should refer to our previous entry, Unemployment - Spanish style, to view the truly gruesome societal consequences of businesses firing (or failing to renew the contracts of) two or three young workers rather than pay two years of finiquito to one 50+ year old in order to accommodate the current economic reality.

One can't help but note, as we radicals of the 1960's age, the curious total reversal of Jerry Rubin's admonition to 'Never trust anyone over 30'.

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Noise alert

From AFOE...

Now doubtless the only reason the (social security) fund decided to invest the money it was holding in Spanish government bonds wasn’t to help the administration hide some debt,...

Apparently, in Edward Hugh's magic national accounts kingdom, bonds sold by the Tesoro to Spain's social security system do not have to be booked as debt. Thanks, Ed. We were obviously flying blind.

And that's not the end of it. Hugh then proceeds to haul out the stale canard (the chart on the left was taken from this post) of 'contingent liabilities'. Referring to the government's recently hatched plan to facilitate the payment of the enormous amount of money owed to private sector suppliers (and not required to be reported as 'debt' by the European Union) by regional and municipal governments...

But the great risk they are taking in doing this is raising the acknowledged debt level, up towards the “high risk area” of around 100% of GDP.

Of course, if he is capable of remaining blithely unaware that the procedure being implemented does nothing to elevate this money from the 'contingent' to the 'acknowledged' list, how would we expect him to be able to report that the state guarantee granted to the loans, to be provided exclusively by commercial banks, will result in 35 billion euros of minimum haircut ECB window-friendly collateral being conjured up for Spain's banking system?

That's the game here - corporate Spain's infrastructure heavyweights (almost all of whom plunged into the business of collecting garbage and such in the first years of the first decade) will get most of their money, the country's town and city halls will wheeze a huge sigh of relief and the banks will continue to keep the ship of state afloat with their repo proceeds.

We're probably attributing to our nation's president more acumen than he possesses, but we can't help but think how Mariano Rajoy's recent innovative manner of announcing that Spain will not meet its previously agreed deficit target may turn into an interesting ploy in the runup to elections - which, if lost, will mark (thankfully) the end of the PSOE as we know it - in Andalucía. Just as the socialist incumbents seem to be getting a bit of much-needed traction from their howling over the PP's labour market reforms, the noise-o-sphere has again latched on to the matter of Spanish debts and deficits (here's a real beauty). What better than a bit of bond market panic to paint the Partido Popular as saviour?

Coinciding nicely with the uptick in the racket is today's 17-point rise in 10-year yields.

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In response to your query

The Random Spaniard remarked in the comments to an earlier post that:

'I was just checking the WTO International Trade Stats and found that in 2010 Spain's share of global exports of goods and services collapsed to its lowest level since before 2000. Thus, I would wonder whether the stellar performance you mention is not merely a bounce-back from a very low trough.'

To which we responded:

'What western country hasn't lost ground on a world basis since 2000?'

The chart we heaved up out of Eurostat data provides us with a partial answer.

Readers with an eye for detail might wonder why the line for Spain is so volatile. Chalk it up to Eurostat's rounding of these figures to an unacceptably parsimonious single decimal place. The smaller the economy the greater the 'margin of error'. We've subtly slipped in a 2-year average to make the Spanish figures easier on the intellect.

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Same problem, different country

Bondad takes a shot at politically-inspired commentators that insist that, among other things, the United States is failing on the exports front. We sympathize.

The chart shows 2010 and (projected) 2011 total exports relative to maxima achieved through 2008 for a variety of countries. It's expressed in percentage points.

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Was somebody mentioning competitiveness?

Spanish exports against the country's GDP - up from 28 to 30 percent from 2010 to 2011. What the nation's businesses can't compete against is the local need for cash.








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If it's red and in a bottle...

From a 2010* report from the Observatorio Español del Mercado de Vino (which really does its homework)...

France had, since January of that year, imported 320,000,000 litres of Spanish wine. 257 million of these were without PDO label and shipped in bulk - that's in tanker truckloads - at 27 euro cents a unit.

Just thought we'd mention it for the next time the reader discovers a serviceable Gallic plonk at a bargain price.

Otherwise, we spent our recent brief break in Valladolid, the heart of the Ribera del Duero, hosted by a gent who knows his way around the bodegas and labels of the area. Sure wish we were a little more alcohol tolerant.

*More recent reports cost up to 60 euros a pop. We love our readers, but not that much.

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Less is more

Adhering strictly to the Edward Hugh school of economic analysis, Pragmatic Capitalism today treats us to this beauty:

CHINA PMI STILL CONTRACTING, BUT IMPROVING

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